Targeting China, India Stiffens Telecoms and power grid rules

NEW DELHI — India is tightening the rules for businesses entering its power transmission sector and making stringent checks on both power and telecoms equipment for malware – moves that government and industry officials say aim to check China’s advance into sensitive sectors.

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Chinese firms such as Harbin Electric, Dongfang Electronics, Shanghai Electric and Sifang Automation either supply equipment or manage power distribution networks in 18 cities in India.

Local firms have long lobbied against Chinese involvement in the power sector, raising security concerns and saying they get no reciprocal access to Chinese markets.

With India and China locked in their most serious military face-off in three decades, the effort to restrict Chinese business has gathered more support from within the administration of Prime Minister Narendra Modi, worried about the possibility of a cyber attack.

The Indian government is considering a report prepared by the Central Electricity Authority (CEA) that sets new conditions for firms bidding for power transmission contracts, tipping the scales in favor of local companies.

According to an official involved in drafting the report, who asked not to be named, it says companies looking to invest in India should have been operating there for at least 10 years, have Indian citizens as top executives, and employees of the foreign firm should have lived in India for a certain period, the official said.

Those companies have to detail where they procure the raw materials for transmission systems, and will be barred from further operations in India if their materials contain malware.

Though the report makes no direct reference to China, the official said the recommendations are intended to deter China from making further headway in India, because of the security risks.

CEA Chairman R.K. Verma said the possibility of a crippling cyber attack on India’s power systems was a key consideration while drafting the policy. “Cyber attacks are a challenge,” he told Reuters.

A representative of a Chinese enterprise engaged in exporting electric power equipment in India told China’s state-run Global Times that India’s industry has long tried to block foreign competition under the garb of safety issues.

“Now, as Sino-Indian relations are getting intense, the old tune is on again. But in fact, it is unrealistic to completely ban China and India power investment cooperation. India will pay a huge price for this,” the paper said.

Shanghai Electric, Harbin Electric, Dongfang Electronics and state-run China Southern Power Grid Co Ltd, all involved in India or trying to enter, did not immediately respond to emails seeking comment on the proposed Indian investment rules.

TELECOMS

The Indian government is moving simultaneously on the telecoms sector, demanding higher security standards in an area dominated by Chinese makers of equipment and smartphones.